Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
) WT Docket No. 97-82
Request for Extension )
Of the Commission's )
Initial Non-Delinquency Period for )
C and F Block Installment Payments )
MEMORANDUM OPINION AND ORDER
Adopted: March 25, 1999 Released: April 2, 1999
By the Commission: Commissioners Furchtgott-Roth and Tristani dissenting and issuing a joint statement.
1. We have before us petitions for reconsideration ("Petitions") filed by SouthEast
Telephone, Inc. ("SouthEast") and Wireless Ventures, Inc. ("Wireless Ventures") (collectively
"Petitioners"). They seek review of the Commission's order, released October 29, 1998, denying
requests for waiver of the October 29, 1998, deadline for late resumption of installment payments
filed by several broadband PCS C and F block licensees, including Petitioners. Additionally,
SouthEast filed an Emergency Request for Stay ("Emergency Request") of the October 29th
Order and a Request for Stay of the auction of the licenses formerly held by SouthEast. On
November 20, 1998, by Public Notice, we requested comment on SouthEast's Petition. We
received two comments in support of the Petition. For the reasons stated below, we deny the
Petitions and SouthEast's Emergency Request.
2. Petitions. SouthEast contends that the Commission did not address the specific facts
and circumstances that supported SouthEast's request for waiver under the "hard look" standard
set forth in WAIT Radio v. FCC. Commenters AirNet and DiGiPH support this argument.
Wireless Ventures argues that the Commission erred in holding that the public interest would not
be harmed by denying its request for waiver.
3. We disagree with Petitioners' contentions. At the outset, we note that the court in
WAIT stated that because the "very essence of waiver is the assumed validity of the general rule; .
. . an applicant for waiver faces a high hurdle even at the starting gate." The Commission has
repeatedly given a hard look to the facts supporting these requests for waiver. Indeed, before
issuing the October 29th Order, the Commission looked carefully at the facts of each individual
waiver request, including SouthEast's, as well as additional facts submitted by SouthEast.
SouthEast has not provided any new facts to convince us that our previous decision was wrong.
4. The Commission's decision in the October 29th Order was clearly contemplated by the
C Block Second Report and Order, the C Block Order on Reconsideration of the Second Report
and Order and the Election and Payment Date Order, in which the Commission
carefully considered all aspects of the installment payment issues raised by Petitioners and
provided restructuring options and a lengthy suspension of installment payments. In the C Block
Second Report and Order, the Commission informed the public that it was unlikely to grant
waivers of the payment resumption deadlines in light of public interest considerations, particularly
as the Commission had already afforded licensees a significant period to raise capital during the
time that installment payments were suspended. We observed in the October 29th Order that
"[i]n formulating, as well as reconsidering, the restructuring options, the Commission addressed
the challenges of raising capital." Acknowledging that access to capital remains an important
issue for most C block licensees, including Petitioners, the Commission nonetheless concluded
that "a further extension of the non-delinquency period would only serve to undermine the
Commission's enforcement of its payment deadlines." Petitioners' requests for waiver were
denied not because the Commission failed to give them the hard look they warranted, but rather
because the Commission does not agree with Petitioners that further extension of the payment
deadline would serve the public interest.
5. Furthermore, we disagree with SouthEast's argument that the Commission's payment
rules are unclear and do not necessarily result in the automatic cancellation of licenses for a late
installment payment. At the time that SouthEast purchased its licenses, the payment rules
provided that a license would cancel following the expiration of any grace period without the
successful resumption of payment or upon default with no grace period. The C Block Order on
Reconsideration of the Second Report and Order amended the rules to provide that a payment
made "more than ninety (90) days" after the resumption payment due date would be deemed a
default on the part of the C or F block licensee. In a Public Notice, released April 17, 1998, the
Wireless Telecommunications Bureau ("Bureau") stated that licensees that failed to meet the July
31, 1998, payment resumption deadline could submit their payment on or before October 29,
1998, without being considered delinquent, if they timely pay a five percent late payment fee.
Most recently, the Bureau reiterated this policy in a Public Notice, dated September 18, 1998, in
which it stated that licensees that miss the late payment deadline shall be in default and their
licenses shall automatically cancel. Contrary to its contentions, SouthEast was well aware that
its licenses would cancel automatically if it failed to make full payment of amounts due on
October 29, 1998, and cannot claim that the rules do not operate as a matter of law to effectuate
automatic cancellation.
6. In denying Petitioners' requests, we reject SouthEast's argument that grant of its waiver
request would be consistent with the TE-MCG decision, in which the Bureau granted
Specialized Mobile Radio (SMR) licensee TE-MCG's request for waiver of 47 C.F.R. 90.812,
which governs installment payments for 900 MHz SMR licensees. In that case, as a result of an
administrative oversight, the Bureau accepted late payment of several installments and timely
payment of subsequent installments from TE-MCG, constructively waiving the deadlines for the
late regularly scheduled payments. In contrast, after clearly stating its intention not to extend the
October 29, 1998 late payment deadline, the Commission expressly refused to grant Petitioners'
waiver requests. Thus, unlike the TE-MCG case, the Commission has committed no act that
could reasonably be construed as constructively waiving the applicable October 29, 1998, late
payment deadline, obviating the need to grant a waiver in this instance. Therefore, we declined to
grant SouthEast's waiver on the merits of its case, and the TE-MCG decision is inapposite.
7. Lastly, SouthEast contends that application of the Commission's rules on late
installment payments and resumption payments to SouthEast is retroactive rule making
prohibited by the Administrative Procedure Act. More specifically, SouthEast claims that the
Commission's elimination of the provisions for grace period requests under former Section
1.2110(e) impaired SouthEast's rights with respect to its previously established installment
payment obligations. AirNet supports this contention. In effect, SouthEast is requesting
reconsideration of the Part 1 Third Report and Order, which was the Order in which the
Commission eliminated the grace period provisions. This request is untimely. Nevertheless,
timely filed petitions for reconsideration of the Part 1 Third Report and Order raising this issue
are pending before the Commission.
8. Requests for Stay. SouthEast bases its Emergency Request and its Request for Stay on
the four prong test for issuance of a stay set forth in Virginia Petroleum Jobbers Ass'n v. FPC,
as modified in Washington Metropolitan Area Transit Comm'n v. Holiday Tours, Inc. Under
this test, a stay is warranted if the movant can demonstrate that: (1) it is likely to prevail on the
merits; (2) it will suffer irreparable harm absent a stay; (3) interested parties will not be harmed if
the stay is granted; and (4) the public interest would favor a grant of the stay. Upon examination
of the Emergency Request and the Request for Stay, we find that SouthEast's arguments fail to
meet the standards set forth in Virginia Petroleum and Washington Metropolitan. SouthEast
bases its contention that it meets the standards for issuance of a stay on the expectation that the
Commission will grant its Petition. As discussed above, this is not the case. Therefore,
SouthEast does not meet the test.
9. Accordingly, IT IS ORDERED that, pursuant to the authority granted in Section 4(i),
303(r), and 309(j) of the Communications Act of 1934, as amended, 47 U.S.C. 154(i), 303(r),
and 309(j), the petitions for reconsideration submitted by SouthEast and Wireless Ventures ARE
DENIED as provided herein.
10. IT IS FURTHER ORDERED that SouthEast's Emergency Request IS DENIED.
11. IT IS FURTHER ORDERED that SouthEast's Request for Stay IS DENIED.
FEDERAL COMMUNICATIONS COMMISSION
Magalie Roman Salas
Secretary